Where is the best buy 50k Investment?

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Where is the best buy 50k Investment?

Account Closed
New to Real Estate · Member since 2019 · 15 posts · 2 votes

Where can I buy a good rental property to pay in cash for $50 k ? I'm a new Investor. This will be my first property

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Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
6y
Originally posted by @Account Closed:

@Mark Kenny

hello ! Thanks for the response.

I'm from San Diego , California it is very expensive to invest here . So I'm thinking out of state . Just not sure how to go about it . I don't like to finance cause I  just want to free and clear property. I've been reading about Columbus and Cleveland Ohio is good to invest ?  that will be out of state . 

I also live in San Diego.  If I had $50k to invest, I wouldn't buy a $50k property, I'd buy two $100k properties with 20% down on each (and have a $10k buffer).  

You'd have $200k of properties that will give you appreciation 4x more than the $50k price. 

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  • Mark Allen Kenny
    Investor · New York City, NY · Member since 2016 · 155 posts · 105 votes
    6y

    @Account Closed Welcome!  Do you mean you're looking for a property with a purchase price of $50K?  Any reason why you wouldn't finance the purchase?

    1Reply
  • Account Closed
    OP
    New to Real Estate · Member since 2019 · 15 posts · 2 votes
    6y

    @Mark Kenny

    hello ! Thanks for the response.

    I'm from San Diego , California it is very expensive to invest here . So I'm thinking out of state . Just not sure how to go about it . I don't like to finance cause I  just want to free and clear property. I've been reading about Columbus and Cleveland Ohio is good to invest ?  that will be out of state . 

    1Reply
  • Account Closed
    OP
    New to Real Estate · Member since 2019 · 15 posts · 2 votes
    6y

    @Mark Kenny

    yes 50k purchase price .

    0Reply
  • Brandon B.
    Specialist · San Diego · Member since 2019 · 16 posts · 20 votes
    6y

    @May Ang

    Hey May - it might make more sense, at that dollar amount and since it is your first real estate investment, to be one of several investors in a project being run by someone with experience.

    3Reply
  • Ryan Evans
    Rental Property Investor · Cleveland, OH · Member since 2016 · 653 posts · 769 votes
    6y

    If you're getting serious about investing in Cleveland you should connect with Lynda who runs the Outback REI Network in SD. I've done some work with her team in Cleveland and they're based out your way. Always good to know people nearby who are doing what you're doing!

    2Reply
  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    6y
    Originally posted by @Account Closed:

    @Mark Kenny

    hello ! Thanks for the response.

    I'm from San Diego , California it is very expensive to invest here . So I'm thinking out of state . Just not sure how to go about it . I don't like to finance cause I  just want to free and clear property. I've been reading about Columbus and Cleveland Ohio is good to invest ?  that will be out of state . 

    I also live in San Diego.  If I had $50k to invest, I wouldn't buy a $50k property, I'd buy two $100k properties with 20% down on each (and have a $10k buffer).  

    You'd have $200k of properties that will give you appreciation 4x more than the $50k price. 

    5Reply
  • Account Closed
    OP
    New to Real Estate · Member since 2019 · 15 posts · 2 votes
    6y

    @Ryan Evans 

    Would you mind to give me contact info of Lynda ? Appreciate it.

    1Reply
  • Account Closed
    OP
    New to Real Estate · Member since 2019 · 15 posts · 2 votes
    6y

    @Cody L

    Thanks . What location you would recommend for a new Investor to invest in $100k Single Family Home ? 

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y

    I would highly recommend any newbie not purchase an OOS $50K property.  @Cody L. indicated two $100K properties and I understand his rationale but I fear $100K still leaves you in a poor class area and so using similar rationale I would recommend a single financed $200K RE that is in at least C+ class (and preferably B class) area or do as @Brandon B. suggested and partner.

    If you purchase a $50K RE OOS it will be in a poor area that has historically zero appreciation.  The rents will be so low that the costs will overwhelm the rents.  50% rule is way too aggressive for the OOS investor on this low cost, low unit count property.  You likely would need to allocate on the order of >70% of rent for expenses.  I highly suggest you come up with a different plan.

    I challenge you to find anyone from So Cal who is investing OOS in $50K low unit count RE for at least 5 years that thinks it is a good idea for the newbie.  I am trying to save you many headaches.

    Good luck

    2Reply
  • Account Closed
    OP
    New to Real Estate · Member since 2019 · 15 posts · 2 votes
    6y

    Hi Dan ,thanks ! Appreciate your inputs :)

    0Reply
  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    6y
    Originally posted by @Dan H.:

    I would highly recommend any newbie not purchase an OOS $50K property.  @Cody L. indicated two $100K properties and I understand his rationale but I fear $100K still leaves you in a poor class area and so using similar rationale I would recommend a single financed $200K RE that is in at least C+ class (and preferably B class) area or do as @Brandon B. suggested and partner.

    If you purchase a $50K RE OOS it will be in a poor area that has historically zero appreciation.  The rents will be so low that the costs will overwhelm the rents.  50% rule is way too aggressive for the OOS investor on this low cost, low unit count property.  You likely would need to allocate on the order of >70% of rent for expenses.  I highly suggest you come up with a different plan.

    I challenge you to find anyone from So Cal who is investing OOS in $50K low unit count RE for at least 5 years that thinks it is a good idea for the newbie.  I am trying to save you many headaches.

    Good luck

    My very first properties were in Houston for ~$100k.  I still have them.  They're still rented for about $1300/month after all these years.  Rents have gone up some, but not a ton.  Ditto values.  Well, one almost doubled but that was more luck of where it was.

    So your point about appreciation is true.  But I'd sure as heck rather someone buy some $100k homes then a $50k home all cash.   There are a lot of solid blue collar C areas where you can get a $100k home and put a solid $1100+/month renter in there.  Those do well for many people  Esp with rates where they're at today. 

    1Reply
  • Steve RozenbergPro Member
    Specialist · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    @Account Closed I could not even tell you in one post all the things wrong with this concept and question. First you need to make sure you know your goals and strategy before even looking at an area. Next you need to make sure you have the right team in place in that area to help you achieve that goal and the right people to help make sure that your strategy is correct and the city you are investing in is aligned with your goal and strategy. Next buying a home for $50k in almost any city will most likely cost you more then double in maintenance costs, vacancy, and most importantly mental stress and your lost time. Especially if you are new and you are investing outside of your area.

    You would have better success to just go to vegas and throw it all on black...based on your question.

    I would say you should take some time and really think about what you want and expect out of real estate and then decide if a $50k house will help you get closer or further away from that goal

    2Reply
  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    6y
    Originally posted by @Account Closed:

    @Cody L

    Thanks . What location you would recommend for a new Investor to invest in $100k Single Family Home ? 

    There are others replying who are, quite frankly, smarter than me.  Or at minimum, better albe to give sound advise.  I often conflate what *I'D* do personally with what someone else asking the question should do. 

    So if you ask *ME* I'd look for homes around $100k in Houston as I think they make good $1k/month+ rentals.  But my first ones (bought when I was in San Diego) were found for me by a property manager who was a friend of a friend.  He'd just say "here is a place you should buy. It's $x.  We can lease it for $y".  And I said "okay".  Now that I know the submarkets I pick them out myself.   But you have to be careful not to just go in blind as not knowing the ins and outs of a submarket, or having a good PM in place, will kill ya. 

    2Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y
    Originally posted by @Cody L.:
    Originally posted by @Dan H.:

    I would highly recommend any newbie not purchase an OOS $50K property.  @Cody L. indicated two $100K properties and I understand his rationale but I fear $100K still leaves you in a poor class area and so using similar rationale I would recommend a single financed $200K RE that is in at least C+ class (and preferably B class) area or do as @Brandon B. suggested and partner.

    If you purchase a $50K RE OOS it will be in a poor area that has historically zero appreciation.  The rents will be so low that the costs will overwhelm the rents.  50% rule is way too aggressive for the OOS investor on this low cost, low unit count property.  You likely would need to allocate on the order of >70% of rent for expenses.  I highly suggest you come up with a different plan.

    I challenge you to find anyone from So Cal who is investing OOS in $50K low unit count RE for at least 5 years that thinks it is a good idea for the newbie.  I am trying to save you many headaches.

    Good luck

    My very first properties were in Houston for ~$100k.  I still have them.  They're still rented for about $1300/month after all these years.  Rents have gone up some, but not a ton.  Ditto values.  Well, one almost doubled but that was more luck of where it was.

    So your point about appreciation is true.  But I'd sure as heck rather someone buy some $100k homes then a $50k home all cash.   There are a lot of solid blue collar C areas where you can get a $100k home and put a solid $1100+/month renter in there.  Those do well for many people  Esp with rates where they're at today. 

    I suspect we are in agreement because my challenge was to find someone investing in $50K low unit count properties that think that it is a good approach for the OOS newbie (also your level of success implies that you were not the average newbie).  As you indicated, your $100K initial purchase (double the $50K challenge) is now almost double, so approaching $200K.  In some markets that have some history of appreciation in excess of inflation, you can purchase $200K properties in solid areas.  You may be able to purchase $100K properties in solid areas in some markets, but would they have historical appreciation better than inflation (remember your initial $100K properties are now approaching $200K due to the appreciation)?

    In summary, for the newbie: use leverage to increase return, do not purchase in low class areas (avoid D/F areas), and purchase in areas that have a history of appreciating at least a little better than inflation.  

    Or look at partnering with a more experienced investor.  Learn from the experienced investor.  I suspect you will learn more than a guru program and it is almost certainly going to cost less.

    2Reply
  • Angela Smith
    Member since 2018 · 161 posts · 152 votes
    6y
    do you have $50K to invest, or are you expecting to get a loan on a $50K property? If a loan, you won't be able to find a mortgage that low.
    1Reply
  • Account Closed
    OP
    New to Real Estate · Member since 2019 · 15 posts · 2 votes
    6y

    Thanks everyone I really appreciate all of your inputs ! 

    0Reply
  • Bradley LaBrie
    Real Estate Agent · Davison, MI · Member since 2018 · 113 posts · 34 votes
    6y

    @May Ang there are investors on here and in general that live in expensive markets buying 3% rule properties here in Flint, MI. A great market for that. Good property management in place too

    0Reply
  • Account Closed
    OP
    New to Real Estate · Member since 2019 · 15 posts · 2 votes
    6y
    Originally posted by @Angela Smith:

    do you have $50K to invest, or are you expecting to get a loan on a $50K property?

    If a loan, you won't be able to find a mortgage that low.

    to invest

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y

    @Account Closed Columbus, Ohio is a great market but your $50,000 will not go very far here.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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  • Angela Smith
    Member since 2018 · 161 posts · 152 votes
    6y
    Originally posted by @Account Closed:
    Originally posted by @Angela Smith:

    do you have $50K to invest, or are you expecting to get a loan on a $50K property?

    If a loan, you won't be able to find a mortgage that low.

    to invest

     Consider using that 50k to leverage a nicer property.  Something that you can use maybe 30k for a down payment and 20k for renovation?  Follow that with a higher paying tenant.  This way, you would know that the property is in good condition when you get a tenant placed. 

    0Reply
  • Bruce May
    Lender · San Diego, CA · Member since 2011 · 664 posts · 231 votes
    6y
    0Reply
  • Rob Gillespie
    Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
    6y

    Hi May, 

    Welcome to BP. great place to learn and connect,. 

    with 50k you have a lot of choices. I would not head into a war zone to buy a bunch of cheap rentals with high rents, that is not for the beginner. It can be very profitable, but you gotta know what you are doing. 

    I am in the Cleveland Ohio market and If it were in this area, i would look into an entry level house in the burbs that needed some work or cleaned out. I would pay cash for it, knock the scary off of the house and resell it at a profit. 

    Repeating this process can grow your 50k quite a bit and then you have even more options of what to do with your cash. 

    I find this to be very low risk and a great learning experience. 

    Would be happy to dive deeper if you have more questions . 

    Good luck!

    2Reply
  • Devin Miller
    Member since 2019 · 14 posts · 2 votes
    6y

    Which zip codes are decent entry level Suburb B class homes in Cleveland?

    0Reply
  • Federico Gutierrez
    Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes
    6y

    IF you buying $50000 Cash homes in Cleveland, they will require work OR they will be in war zones. Take that $500000 spilt it into 2 x $250000 down payments and buy in a C area at the least.

    0Reply
  • Kate Shaw
    Santa Monica, CA · Member since 2019 · 8 posts · 2 votes
    6y

    Hey @Account Closed Please delete if not allowed but... I have a property I was offered as a purchase (my profitable Joshua Tree Airbnbs) and am actively looking for a $50k hard money loan. If you'd be interested in a 1-2 year loan with super favorable interest rates for you as the lender, let me know. 

    0Reply
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